CBD office space vacancy rates drop ... but not for the right reasons: NT Property Counci

A NEW report has found Darwin city’s office space vacancy rates have dropped ... but not for the right reasons, according to the NT Property Council

Vacancy rates have dropped in Darwin city but not due to population or business increases. Picture: Justin Kennedy

DARWIN City’s vacancy rates have dropped and “pockets are being filled up in better-quality buildings”, according to the NT Property Council.

But this is only due to the demolition and construction of buildings, not an increase in business or population, executive director Ruth Palmer said.

The Property Council of Australia’s annual audit of office space found vacancy rates in Darwin CBD dropped from 17.2 per cent in 2019 to 16.8 per cent in 2020.

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“The results indicate that we are seeing pockets being filled up in better-quality buildings, but we must remember that is more of a timing issue, rather than any real reduction of space available for lease,” Ms Palmer said.

“Along with the Cavenagh House demolition, extra space leased in the TIO Centre and Charles Darwin Centre has contracted vacancies in the A Grade segment.”

A Grade property vacancies dropped from 8.1 per cent to 7.1 per cent. B Grade properties rose from 27.4 per cent to 28.2, and C Grade properties increased from 54.8 per cent to 58.7 per cent.

Ms Palmer said more needed to be done to attract businesses into the B Grade and C Grade properties.

“Our concern is still getting the activity within the CBD but also the Territory as a whole,” she said. “We really need to start focusing on the population, crime, economy and how that all ties into the activity within our city centres.

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“We need to continue to focus more on improving amenities in the city that aim to bolster construction, retail, hospitality, tourism, and the ever-growing number of residents that call the city centre their home.

“Taxes and levies don’t encourage investment and they definitely will not improve the performance of the CBD. We believe it will further deteriorate the market.”

She said the key to improved rates was population growth. “It is difficult to activate buildings when we have consistently recorded a negative change in population,” Ms Palmer said.